Selling Strategies - Setting A Stop Loss

However, when we make the decision to jump into the muddy waters of the stock market, its always a good idea to have a life jacket ready, just in case. Sometimes the best way of lowering exposure to risk is not to invest at all!

Trailing stop loss. So, how to best protect yourself when the markets disagree with your due diligence? We all have stories of that "must have" "can't lose" stock that looking back, we didn't really need to buy, and it definitely lost.

Its important to understand the psychology of investing. When we make money, there is instant euphoria. When we start to lose money, there is a sudden "deer caught in the headlights" type of emotion, which makes us unable to do the right thing. We fear that the moment we sell, will be the moment that it starts to rebound. Not only do we fear that we will be that guy who sold at the low of the day, but that we will miss out on untold fortunes because we got out too early.

While this happens, more often than not, a small loss turns into a much bigger loss. Remember, a 40% loss started off as a 5% loss.

So what is the best stop loss strategy? Well, we happen to have 2. One simple, one a little more complicated, but possibly more effective and capital saving.

The first strategy is called a "trailing stop loss". Its simple and effective. We're going to add a small twist to it. A traditional trailing stop loss simply means that you set a percentage that you are willing to lose. For example, if you purchase 1000 shares of ABC at $5/share, you could set a stop loss at 10%. This means that if the stock dips below 10% of your purchase price ($5 - 10% = $4.50), you're out of the market and no longer risking capital. If the share price moves higher, you would set your stop loss at 10% below the closing price. If ABC moves to $5.50, you would set your stop loss at $4.95. If the stock drops below that price, you're out.

By setting your stop loss at the time of your purchase, you are taking the emotion out of investing. Specifically, you are taking out the "deer caught in the headlights" emotion. This will save you grief and will save you money. If your stock moves like you think it will, you can lock in your gains automatically.

Our twist to this strategy though, is to first establish the dollar amount that initial stop loss is worth, and let that dictate what your stop loss will be.

Given the same example as above, your initial stop loss would be $4.50. You would only be risking $0.50 per share or $500. This represents the most you are willing to lose, regardless of which way the investment goes.

If the share price moves to $7.00, instead of setting your stop loss at $6.30, (thus risking $0.70 or $700 of your money), you would set your stop loss at $6.50, which risks the same $500 you were initially willing to lose when you first started.

This little twist helps you keep more of your profitable investments. Why put more profits at risk?

The second stop loss strategy is, although a little more complicated, will protect more of your money.

While we would love to take credit for this strategy, we found it when reading Chart Trading by Darryl Guppy. This strategy starts by looking at your overall capital, not the amount of the specific investment. For example, if you had $20 000 in your investment account, you could trade 51 times if each time you invested you put 2% of your total capital at risk.

While 2% doesn't sound like a lot, lets have a look at an example. Given your investment account has $20 000 in it and you only want to put 2% of it at risk, you would be willing to risk $400 per trade. This ensures that you will have 51 chances to get it right before you run out of money.

Where you set your stop loss is basically the point where you are risking $400. Given our initial example, your stop loss would be at $4.60. If the price moves from $5 to below $4.60, you have lost $400. What if you purchased 2000 shares at the same $5? Your stop loss would be then set to $4.80. Anything below that, and you have risked more than $400. If you think that you want a deeper stop loss, then you would purchase fewer shares. The idea is simple: you never risk more than the same amount per trade.

As the price increases, you then change the amount of your stop loss accordingly. If the stock hits $7, you would set your stop loss at $6.60.

This will lower the number of chances you have at getting it right. Your 10% stop loss would put $1000 at risk. However, what if you purchased 2000 shares at $5 each?

Given our initial stop loss strategy, assuming you lost $500 each trade, you could lose approximately 40 times before you ran out of money.

On the other hand, if the market disagrees with you, you can still keep the majority of your money! This way, when your hard work pays off, you'll appreciate it more. Its much better to think about the amount you are prepared to lose.

Many investors think of the ways they are going to spend their profits before they are made. Its up to you how much money you are preparing to risk.

The ABCs Of Fundraising

You've properly prepared for that day taking into consideration almost everything that you could think off. There 's a few days left before the promised fund raising event.

What if there was a low turnout of people? But what if things did not push through as planned? The suspense is killing you. The only thing to do now is wait and see if the event will be successful of not.

It 's not always good to base your fund raiser on "what ifs". It is always best to have a comprehensive plan and specific fund raising strategies to guide you and your group to gather enough support and donations for your cause.

That 's why if you have very limited experience in organizing fund raisers, it might be best to get the help of your friends or the community. Get people involve in your charity work or fund raising activity. However, if you and your group still feel that the activity remains weak, you could always hire some professional help.

Indeed there are several companies that offer their services to schools, churches, organizations, and institutions. These companies are fund raising think tanks. Their job is to come up with great fund raising ideas.

Fund raising has become a science. It no longer involves simple selling of cakes, pastries or food for a cause. It involves a meticulous process of setting goals and analyzing possible actions to attain those goals taking into consideration the various factors like operations costs.

One of the known professionals in the job is the ABC Fund Raising Inc. The company has been a around. You might have seen their fund raising works in various church, school or foundation events. The company began in the early 1990s and has been a great help for communities in and around Colorado.

ABC Fund Raising offers a lot of programs that can be customized to fit the specific needs of a group. They offer quality products that earn very high profits where you can easily raise funds.

According to testimonials from the company 's website, ABC Fund Raising is a great company to work with. The company is said to be a "fair, fun and honest" company to work with. Almost all testimonies claim of having an increase in their fund raisers when they availed ABC 's services.

Sometimes, it better to have some fresh minds to have a go at your fund raising campaigns. That 's why people hire outside help. To maximize their profits and help them reach their desired goals, people hire companies like ABC Fund Raising to keep a fresh flow of fund raising ideas and help ensure a successful campaign.

Raising funds can be really hard especially if your organization is not known or when it is just starting its operations. Face it, with today 's rising commodities, people do not part with their money that easily. They need a very good reason to do this.

In raising funds, you need to either have a great project goal which people can identify with or a great product that you can sell, the proceed of which can fund your project. Although there are people who will want to help for a good cause, most remain skeptical about charity fundraising campaigns, thinking that they are bogus operations.

Because of this, some organizations tend to focus on the products that they are selling in order to fund their operations rather than their projects. Although this can also work, a fundraising campaign must have a product or a service that will really stand out. With thousands of products in the market that you can sell, this can be really confusing.

Below are some questions that you must consider in choosing a product that is unique and with a potential for success. How much do you need to raise?

Before deciding on the product, decide first on your target money. How much money do you need to raise for your project? If you only need to come up with a small amount of money, small items that sell fast can be a good product. For instance, candies, chocolates and lollipops may not give you a lot of money but they can be sold faster than you can say fundraising. However, if you need an amount that is over a few thousand dollars, you may want to consider items that you can buy at cheap rates and then resell in a much higher price without being overboard. What product will most fit your organization?

What are your track record? If the organization is for indigenous tribes in Asia, you can look into selling artworks that are made by that tribe. For instance, if you are organizing a project for kids, it is good to sell products or services that are closely connected with kids. With many products to choose from, you can tailor fit the items that you will be selling on the target market of your organization.

Although a unique product can be a big marketing mistake. If your organization has done fundraising campaigns in the past and has been identified with certain products, it is good to stick with that product as long as the track record is excellent.